Comment Re:Tax avoidance (Score 1) 592
This is also for people. Of course the companies that own the ships traveling in that area are profiting from such protection, BUT - once again, the companies are just people, the shareholders, management, employees - those people benefit from the protection from pirates. The company as a juridical person doesn't care.
Another example would be: If I have company and the company and this company generates some profit. As long as I don't withdraw the money from my company, I can not use the money. The company can reinvest the money (before the end of fiscal year) and pay no taxes, or save the money (during the end of fiscal year) and pay the taxes. Even if the state for example by protecting its ships increases its profits, nothing changes, the money is still stuck in my company. If I want to collect my profits, the money will be taxed by income tax, otherwise my company will reinvest the money in some point in the future (inflation is the force causing this and is strong enough).
When I state it as simple as possible, income taxes are just forcing companies to reinvest their profits the same year and don't save anything for future.
Another example would be: If I have company and the company and this company generates some profit. As long as I don't withdraw the money from my company, I can not use the money. The company can reinvest the money (before the end of fiscal year) and pay no taxes, or save the money (during the end of fiscal year) and pay the taxes. Even if the state for example by protecting its ships increases its profits, nothing changes, the money is still stuck in my company. If I want to collect my profits, the money will be taxed by income tax, otherwise my company will reinvest the money in some point in the future (inflation is the force causing this and is strong enough).
When I state it as simple as possible, income taxes are just forcing companies to reinvest their profits the same year and don't save anything for future.